8-KAcquisitions & DispositionsRegulation FDExhibits & Filings

INTERNATIONAL BUSINESS MACHINES CORP 8-K Report, Acquisition Completed (Nov 4, 2021)

Filed November 4, 2021For Securities:IBM

Summary

On November 3, 2021, IBM successfully completed the spin-off of its managed infrastructure services business, creating a new independent public company named Kyndryl Holdings, Inc. (Kyndryl), trading under the symbol "KD" on the NYSE. IBM distributed 80.1% of Kyndryl's outstanding shares to its common stockholders on a pro-rata basis (one share of Kyndryl for every five shares of IBM held). This transaction was structured as a tax-free spin-off, with no additional payment or share exchange required from IBM shareholders. This strategic move signifies IBM's ongoing transformation to focus on its hybrid cloud and AI businesses. The spin-off is expected to allow IBM to concentrate its resources and strategic direction on higher-growth areas, while Kyndryl will operate as a standalone entity to serve its global client base in managed infrastructure services. Investors can find additional unaudited pro forma financial information reflecting the spin-off, as well as non-GAAP financial measures, on IBM's Investor Relations website.

Key Highlights

  • 1IBM completed the spin-off of its managed infrastructure services business, establishing Kyndryl Holdings, Inc. as an independent entity.
  • 2IBM distributed 80.1% of Kyndryl's shares to IBM stockholders on a pro-rata basis (1 Kyndryl share for every 5 IBM shares).
  • 3The transaction was a tax-free spin-off with no consideration required from IBM shareholders.
  • 4Kyndryl will trade independently on the New York Stock Exchange under the ticker symbol "KD".
  • 5This separation is a key step in IBM's strategic focus on its hybrid cloud and artificial intelligence businesses.
  • 6Investors can access pro forma financial information and non-GAAP disclosures related to the spin-off on IBM's investor relations website.

Frequently Asked Questions

This 8-K filing announces the completion of IBM's spin-off of its managed infrastructure services business, which is now operating as an independent company called Kyndryl Holdings, Inc.

IBM shareholders received 80.1% of Kyndryl's outstanding shares through a pro-rata distribution, where for every five shares of IBM common stock they owned as of the record date (October 25, 2021), they received one share of Kyndryl common stock.

The spin-off was structured as a tax-free distribution, meaning IBM shareholders did not pay any consideration to receive Kyndryl shares. The intention is that IBM can now focus on its core growth areas (hybrid cloud, AI) while Kyndryl operates independently. The market value of IBM shares will now reflect its post-spin-off business composition.

IBM has posted unaudited pro forma financial information reflecting the spin-off on its Investor Relations website (www.ibm.com/investor/). They have also provided non-GAAP financial information with reconciliations to GAAP measures.